Why You Should Be Checking the SEC Yield

There are plenty of reasons why you should be checking the SEC yield, rather than the current yield or distribution yield, when it comes to bond funds. While many brokers and advisors would rather not have investors looking at the SEC yield, Tom wants everybody to know that this is something they should be aware of. In this video, Tom and Brendan talk about SEC yield and also go over an example of how knowing this number can help investors. Don’t get stuck looking at misleading bond fund yields, check out this week’s video and become educated on this topic!

The main reason why you should be checking the SEC yield and not the current or distribution yield is because the SEC yield gives investors the net rate of what that particular bond fund will do for them. If you’re looking at a bond’s current yield, that is merely its “coupon rate divided by its current price”. When you look at a bond’s SEC yield you’re looking at its dividends and interest earned over a time period, minus the fund expenses. Investors need to take expenses into the equation when looking to invest in any bond fund. This makes looking at the SEC yield vital.

Learn more in this week’s video!

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About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.

The information on this website and blog do not involve the rendering of personalized investment advice. A professional advisor should be consulted before implementing any of the options presented. No content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.